JG Summit raising P50 billion for Meralco buy-in

JG Summit Holdings Inc. said on Tuesday that it plans to raise P50 billion from a combination of bank loans and bond issuance to fund the acquisition of the remaining shares of San Miguel Corp. (SMC) and its units in the Manila Electric Co. (Meralco).

“JG Summit already have over $500 million in cash and with the supports or our bankers we are confident to fund the acquisition,” said Lance Gokongwei, president of JG Summit, on the sidelines of the Cebu Pacific’s 100 Lucky Juans event.

He added that, “The company plans to raise close to P50 billion more through bank loans and bond issuance.”

SMC and JG Summit has arrived at an agreement where the food conglomerate will sell its remaining 27.1-percent stake in Meralco for P72 billion.

In a statement issued through the Philippine Stock Exchange on September 30, SMC said that its Meralco shares along with those of SMC Global Power Holdings Inc. and San Miguel Pure Foods Co. will be sold to JG Summit.

SMC acquired the Meralco shares five years ago, at about P90 a share. The price of Meralco’s shares closed at P299 on Tuesday. SMC and its allied units previously had a 32.8-percent stake in Meralco.

Earlier, SMC also said that it was finding ways to dispose of its 32.9-percent stake in Meralco within the year to help generate $35 billion or approximately P1.5 trillion for an investment plan to enter or beef up its presence in industries such as airlines, roads and railways, mining and energy.

“In our perspective, it’s [Meralco] a very well run company and it has direct play on the continuing growth of the Philippine economy. As the economy grows, the demand for electricity grows. So, that’s the reason [we are taking a stake in it],” Gokongwei said.